"We’re finally starting to accept it as a reality that the boom period, for 20 years from 1982 to the highs in 2000 and 2007, is now finished. The glory days, economically speaking, are finished for awhile.
"It’s going to be a re-assessment of the way people think about the future. They’re going to be much more concerned about spending, hoarding money, trying to keep the jobs they have, and cutting back on all kinds of luxury spending like vacations, cars, boats, trips, houses, and everything else. It will be much more survival-oriented.
"Unfortunately, that’s going to get even worse as 2020 comes around. This is just the beginning of the bad psychology that’s going to be unfolding for a long time.
".......under Wave theory, there are different levels of bear markets. The whole big-picture bear market started at the high in 2000. That’s going to go on for about 20 years. The smaller bear market, within this larger bear market, began at the high in 2008, and that will go on for about four to six years.
"In other words, after we realize we’ve survived 2012, we’ll probably get a really nice rebound, and the stock market may even go back toward the highs of 2007.
"Economically speaking, things still aren’t going to be great for a long time. I suspect the only way the stock market is going to be able to recover back to the highs of 2007 is because of inflation. The actual values are less, even though it appears that we’re at the same level.
"I think we’re going to go through a deflationary period, which we can go into some other time. We’ll be in a deflationary period for probably the next two to three years. After that, we may have some mild inflation that occurs that will allow the market to go back to the same highs numerically, but the value will actually be less.
"It’s the idea that $100 now buys only one-tenth of an ounce of gold, whereas 50 or 100 years ago it bought three ounces of gold. It’s the same numerical value, but it’s worth less."
Click here for full transcript of November, 2009 interview
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